[Click eStock] "Samsung Engineering Achieves 90% of Annual Order Target"

[Asia Economy Reporter Song Hwajeong] Korea Investment & Securities stated on the 25th that Samsung Engineering has achieved 90% of its annual order target, and with the stable progress of the contracted projects and existing sites, sales and margins are expected to increase next year. They maintained a 'Buy' investment rating and a target price of 33,000 KRW. Additionally, Samsung Engineering was presented as the top preferred stock in the industry for next year.

Samsung Engineering announced on the 23rd that it signed a contract with Saudi Arabia's state-owned oil company Aramco for the EPC (Engineering, Procurement, and Construction) of the 'Jafurah Gas Processing Package 1 Project.' This project is part of the development of the Jafurah shale gas field located 400 km east of Riyadh, the capital of Saudi Arabia. Samsung Engineering is responsible for constructing the gas processing facility that removes acidic gases such as sulfur compounds and impurities from the gas mixture to produce high-purity gas. With this order, Samsung Engineering is participating in Saudi Arabia's first shale gas field project.

Kang Kyungtae, a researcher at Korea Investment & Securities, said, "The expected construction cost for this order is 1 billion USD, and Samsung Engineering's cumulative new orders for the third quarter of this year amount to 4.4 trillion KRW. Including the Jafurah project order, the total reaches 5.4 trillion KRW," adding, "This means 90% of the annual order target has been achieved."

Starting with the Jafurah project, large-scale construction orders planned by major oil-producing countries in the Middle East are expected to continue. One project with expected final results by the end of this year or early 2022 is Aramco's Zuluf onshore oilfield development project, which is valued at 4.25 billion USD. Researcher Kang explained, "Samsung Engineering is an EPC company that achieves a stable gross profit margin (GP margin) of around 10% in overseas projects, consistently generating profits from the contracted projects. The stable progress of existing sites such as Mexico DBNR, along with the contracted projects, is a factor that raises expectations for Samsung Engineering's sales and margin growth next year."